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Management Consultancies Association (MCA) Job Watch: dealing with the downturn series

Fiona Czerniawska
Management Consultancies Association
17 December 2008

Drawing on the experience of HR consultants, this paper identifies six key steps that organisations need to take in order to retain their best people during the coming months.

In contrast to the recessions of the early 1980s and 1990s, analysts predict that many job losses of the current downturn will be among managers and other professionals. It is predicted that unemployment figures will keep rising for some months to come, and if, as expected, a high proportion of these cuts fall on managers, there is a real danger that organisations will seriously damage their – and the UK’s – longterm ability to compete. Unless this risk is managed effectively, the British economy will take longer to recover from a recession that will also be deeper than necessary.

This paper looks at the nature of recent and expected job losses, and outlines six ways in which organisations can ensure they do not throw the good people out with the bad.

4. Be honest

“We’re still in a competitive market...and you can’t afford to disengage your best people. While scaling back bonuses, intelligent organisations also realise that it would be foolhardy to cut them completely.” Phil Rice at PA Consulting Group

This takes us to a further point: transparency. “Where there’s ambiguity, it is a leader’s job to show a clear path through,” says Scott McArthur. Economic uncertainty creates an information vacuum which is inevitably filled by rumours. But organisations habitually ignore this and think that sending out an email to all employees constitutes effective communication.

Managers often think their role is to sweep understandable fears under the corporate carpet, maintaining a show of optimism at all costs. But the irony is that openness is a far more effective way to maintain morale. Nothing de-motivates people more than a sense of being deceived – and this is particularly true where high-performers are concerned. “Senior managers have to rise to this challenge,” argues Phil Rice at PA Consulting Group “Instead of going around saying everything will be OK, they should explain how serious the situation is and keep people up-to-date on a regular basis.”

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